Oil hits multi-year high above US$ 86, then pulls back

REUTERS: Oil hit a three-year high above US$ 86 a barrel yesterday driven by tight supply and a global energy crunch, although prices eased as some investors took profits on signs the rally is looking overstretched.

Helping to drive the latest gain, a supply report from the U.S. Energy Information Administration on Wednesday showed crude and fuel inventories tightened, with crude inventories at the Cushing storage hub falling to a three-year low. 

Brent crude rose as high as US$ 86.10, the highest since October 2018, but by 0815 GMT was down 79 cents, or 0.9 percent, to US$ 85.03.

U.S. West Texas Intermediate crude fell 57 cents, or 0.7 percent, to US$ 82.85.

“We saw some correction, but overall sentiment remained firm as there have been no large increases in output by the United States or OPEC,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.

The price of Brent has risen over 60 percent this year, supported by a slow ramp-up in supply by the Organization of the Petroleum Exporting Countries and allies, and a global coal and gas crunch which has driven a switch to oil for power generation.